JAKARTA The United States Securities and Exchange Commission (SEC) is reportedly considering banning cryptocurrency staking. Coinbase CEO Brian Armstrong said the same thing in a tweet, saying he had heard that the securities agency was planning to ban crypto staking for retail investors.
The SEC has not made official comments regarding these rumors, although the agency has repeatedly stated that most digital assets qualify as securities and must be within their scope of regulations. Previously, Gary Gensler, chairman of the SEC, also indicated that staking might fall within their scope of regulations.
Staking crypto requires the process of locking coins to validate transactions on various blockchains, such as Ethereum. Many crypto exchanges, such as Coinbase and Kraken, already offer staking products to increase their income and provide these facilities to retail investors without specialized hardware. In terms of Ethereum, the minimum number of staking is 32 ETH and provides a yield reward of about 6 percent.
The crypto exchange Coinbase is under pressure from the US Securities and Exchange Commission (SEC) for offering staking services on its platform. This US-based Coinbase is now the second largest store of Ethereum. Coinbase CEO Brian Armstrong wrote in his latest thread that staking is an important innovation for crypto because it allows users to participate directly in running open crypto networks.
This is not the first time Coinbase has clashed with the SEC. Crypto exchanges should cancel their crypto loan products after pressure from the securities agency. Currently, staking services are very popular after the Ethereum blockchain platform switch to Proof-of-Stake method in September 2022. With Shanghai's hardfork to be carried out in March 2022, ETH holders will be able to pull their staking coins.
The SEC has yet to provide an inspection-related response to Coinbase, however, it has repeatedly stated that most digital assets qualify as securities and must comply with their regulations. Whether this will be a difficult moment for Coinbase and its users, or it will end in a good deal, is still a question mark.
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